Is the stock market rigged? This could have been the headline for the last 400 years – possibly longer – depending on when you claim the stock market “started.”
It seems like every week the media “uncovers” that the market is rigged. Some of the coverage is thoughtful, and some is not.
Today the focus is on high frequency trading. Is this yet another way the stock market is rigged?
Maybe, but the important point to remember is that this does not matter if you are a smart, long term investor. Yes, that’s right. All this frightening news coverage about an unfair investment market is totally irrelevant if you implement the long term, diversified investment strategy that you should be doing anyway.
Millisecond trading may effect share prices in the short term, but it doesn’t effect the operations of the companies you own. It only effects you if you jump in the shark tank and decide to be a short term trader yourself.
So don’t be too disheartened by hearing that the stock market is rigged. It may make short term trading more problematic, but I don’t care about that, and neither should you. The strategies that you should be following (long term investing and diversification) still work just as well as they always have.